Ramkey Group plans first pharma SEZ

Andhra Pradesh is to house the country's first Special Economic Zone (SEZ) for Small and Medium Enterprises (SMEs).

The first phase of the project, meant to house about 60 SME pharmaceutical manufacturing units in 200 acres of land is to be ready by mid-2008.

The SEZ for pharma SMEs, co-promoted by the AP Industrial Development Corporation and real estate developer Ramkey Group, is to be part of the prestigious Pharma City at Vizag.

"For the first time in the country, we are planning to construct incubation centres for bulk drug and pharmaceutical manufacturing in Vizag. The incubation centres are unique as they are not intended for research or pilot scale production, but for full-fledged manufacturing operations," Ayodhya Ramareddy, chairman, Ramkey Group says.

"In addition to the entire physical infrastructure, we are also taking care of all statutory approvals. The building and equipment will also be readied by us. It is going to be a world class facility for a small scale manufacturer who wants to just plug-in into the business," he adds.

The biggest attraction of the SEZ is the cost effectiveness it offers the entrepreneur. With small scale bulk drug units getting shut down elsewhere due to mounting environmental problems, the hassle-free facility, being custom built for the manufacturer, is expected to attract manufacturers in large numbers.

"While we have earmarked 200 acres for the first phase, we have made an additional 150 acres of land for future expansion. The land is being developed with an initial investment of over Rs 150 crore (Rs 1.5 billion)," Ramareddy explains.

The SEZ is not aimed at established companies but instead are targeting technocrats and new comers into pharmaceutical manufacturing business.

"We have decided to have a flexible business model for the SEZ. Once the common facilities are developed, the land would be given as per the client's requirement. If someone needs only land and common facilities, he can lease it from us," Ramareddy said.

"We are also willing to customise the entire manufacturing facility for the manufacturer. Though we intend to work on a user fee model, we are yet to finalise the fees. What I can say is that our charges will be linked to the investment and we are looking at 18-22 per cent return on investments," he explains.

Welcoming the move, M Narayana Reddy, president, Bulk Drugs Manufacturers Association), said that the SEZ will bring tremendous reduction in the initial investment that has to be made by the entrepreneur.

"The biggest advantage of the project is the availability of financiers for the project. A scientist, who has a clear business idea, can become an entrepreneur by investing minimum time and resources through the project," he said.

While the entire project is to be developed by Ramkey, 11 per cent of the investment is to be chipped in by the APIDC. The promoters are expecting to turn the SEZ operational by June 2008.

The project is attracting enquires from within the country and abroad. "New generation entrepreneurs from abroad and existing small scale bulk drug players are equally interested in reserving space in the SEZ," they claimed.